Online shopping giant Amazon sells its own products. However, it also offers a Marketplace where third-parties can sell their wares.
Cases involving product purchases from third-party sellers have been causing Amazon headaches. Now, it’s gotten worse.
A decision by a federal appeals court allows consumers to sue Amazon for defective third-party purchases. We have details on the case and what Amazon’s next move may be.
Amazon sued for a defective third-party sale
In 2015, Heather Oberdorf of Pennsylvania ordered a dog leash from a Marketplace seller called The Furry Group.
As she was walking her dog, the leash broke and flew toward Oberdorf’s face. The incident left the woman permanently blind in one eye.
The Marketplace seller hasn’t been heard from since 2016, but Oberdorf sued Amazon, accusing the company of negligence. Last week, Oberdorf scored a major court victory.
The 3rd U.S. Circuit Court of Appeals in Philadelphia largely upheld a lower court ruling that said Oberdorf could sue Amazon for defective products from its platform, regardless of who made the items. The court did note that its decision was based under Pennsylvania’s strict product liability laws.
Two other lower courts have ruled in separate cases that Amazon was not liable for defective third-party merchandise. One ruling from a Tennessee court last year stated that Amazon was not responsible for a hoverboard purchased through a third-party. In that case, the hoverboard exploded and burned a home down.
The 3rd Circuit appeals court also found that the Communications Decency Act (CDA), the law that protects online companies from being held liable for content posted by users, only protects Amazon from elements of Oberdorf’s claims.
“To the extent that Oberdorf’s negligence and strict liability claims rely on Amazon’s role as an actor in the sales process, they are not barred by the CDA,” according to the ruling.
The 3rd Circuit appeals court sent the case back to the lower to settle the CDA issues.
Amazon decision could be costly
While Amazon has yet to comment on the decision, legal experts say it is likely that Amazon will appeal the decision. They also note that the decision may only apply to Pennsylvania because of its strict product liability laws.
If the decision is upheld, Amazon could find itself open to an avalanche of lawsuits in other states with laws similar to those in Pennsylvania. And, the Amazon Marketplace brings in more than chump change to Amazon.
Amazon CEO Jeff Bezos said that in 2018, third-party sales came in at $160 billion, compared to $117 billion for Amazon’s first-party sales.